by Company also reports record quarterly retail sales of $252 million
MONROE, Mich. — La-Z-Boy reported an increase in consolidated sales and net income for the second quarter — and first half — ended Oct. 29.
The company reported consolidated sales of $611.3 million during the quarter, up 6% from the $575.9 million reported the same period last year, a second-quarter record.
For the first half, sales totaled $1.2 billion, up 10.4% from $1.1 billion last year.
For the second quarter, net income was $46.8 million, or $1.07 per share, up 15.9% from the $40.4 million, or 89 cents per share, reported last year. For the first half, net income was $85.7 million, or $1.96 per share, up 30.6% from $65.6 million, or $1.43 per share, reported last year.
Sales in the retail segment during the second quarter rose 31% to $252 million, from $192.4 million, an all-time quarterly record. For the first half, sales rose to $488.2 million, up 30.4% from the $374.3 million reported last year.
Operating income for the retail segment during the quarter was $41.5 million, up from $24 million the same period last year. For the full first half, it was $79.7 million, compared to $44.4 million last year.
The company said that delivered same-store sales increased 25% during the quarter because of improved service to consumers and the achievement of lead times that were closer to pre-pandemic levels.
Total written sales for company-owned La-Z-Boy Furniture Galleries fell 5%, which the company said reflected softer demand across the industry, driven by “economic uncertainty and weaker consumer sentiment.” Meanwhile, the company said, written same-store sales for company-owned furniture galleries fell 10% but were 12% higher than pre-pandemic levels reported in the second quarter of FY 2020.
Sales in the wholesale segment during the quarter totaled $446.2 million, compared to $439.1 million last year, a second-quarter record. For the first half, they totaled $888 million, compared to $832.6 million last year.
The company said that second-quarter sales were driven “by the realization of pricing and surcharge actions, coupled with favorable channel and product mix.”
These factors, it said, were partially offset by lower volume, which was primarily the result of some dealers delaying receipt of finished goods because of warehouse constraints.
Operating income in the wholesale segment totaled $38.5 million during the second quarter, compared to $43.1 million last year. For the first half, operating income was $64.6 million, compared to $61.5 million last year.
Other highlights from the report were as follows:
+ Joybird’s delivered sales decreased 5% to $38 million, and written sales declined 27% versus the year-ago second quarter. This, the company said, reflected “both slowing e-commerce trends and the effects of changes in campaign execution with a key marketing partner which have since been reversed.”
+ Joybird also posted a loss for the period, “primarily reflecting lower volume, an unfavorable shift in product mix, and a lower return on advertising spend.”
+ Overall the company ended the quarter with $208 million in cash and $19 million in short-term investments to enhance returns on cash — “and no external debt.”
+ Year to date, the company has generated $31 million in cash from operating activities versus $15 million in the prior-year six-month period.
+ It also spent $40 million on capital expenditures, which it said were related to “La-Z-Boy Furniture Galleries store projects, new stores, and upgrades at our manufacturing and distribution facilities.”
+ It also reported that year to date it returned $19 million to shareholders, including $14 million in dividends and $5 million in share repurchases. The company said it also has about 7.3 million shares available for repurchase under its authorized share repurchase program.
In a statement, Melinda D. Whittington, president and chief executive officer, said, “We delivered record second-quarter sales and operating performance in a challenging environment led by our company-owned retail business. Strong supply chain execution in the period allowed us to reduce our backlog and improve service to customers and consumers as we continue to shorten lead times and move closer to delivering on our brand promise — quality custom furniture with speed to market.”
“On the strength of that value proposition, our business remains larger than pre-pandemic levels as consumers continue to place a value on the comfort of their homes and entrust La-Z-Boy to deliver it.” Whittington added. “As we face near-term macroeconomic and geopolitical headwinds that have slowed the pace of written sales, we are operating from a position of brand and financial strength.
“We remain focused on the long term, controlling what we can, and positioning the company to move through this period with ongoing operational excellence. We are pivoting quickly to respond to market dynamics, including proactively aligning our cost structure with demand, and making prudent investments to drive long-term profitable growth through Century Vision. As we tackle what lies ahead, we are confident we will navigate the environment well, build for the future, and emerge stronger while increasing market share throughout these challenging times.”
